The company won’t pay drivers to make the switch, but rather make driving an EV more lucrative by adding an extra fee.
Uber announced Tuesday that “100 percent” of rides will take place in electric vehicles by 2030 in the US, Canada, and Europe, and by 2040 for the rest of the world. But rather than pay drivers directly to trade their gas-burning vehicles for electric ones, the company will impose an extra fee on trips completed in an electric vehicle to incentivize drivers to make the switch.
Starting today, Uber is launching its “Uber Green” surcharge in 15 cities in the US and Canada. For a dollar extra, riders can specifically request a hybrid or electric vehicle. Drivers who use hybrid or electric vehicles to pick up passengers will get an extra 50 cents per ride, while drivers using specifically battery-electric vehicles get another dollar on top of that — for a total of $1.50 extra per ride.
That means trips in hybrid or electric vehicles are about to become slightly more expensive for Uber customers, which Uber sees as a necessary cost to help speed the transition to a zero-emissions fleet. Uber will also spend $800 million of its own money to help “hundreds of thousands of drivers in the US, Canada, and Europe transition to battery EVs by 2025.”
Still, Uber thinks that by using more carrot than stick, it can get better results. For example, drivers won’t be required to drive electric or hybrid vehicles to make money on Uber’s app, even by the target date of 2030. The company believes the shift to zero emissions will be enormous and that more good will come from incentivizing drivers rather than punishing them.
The news comes as talk of requiring ride-hailing companies to use more electric vehicles is gaining traction among many big US cities. It’s also at a time when the view that ride-sharing services are more environmentally friendly than other modes of transportation has been contradicted by a growing body of evidence. Research suggests that the average ride-hailing trip creates about 50 percent more pollution than the average traditional car trip. Even worse, studies show that over half of all ride-hailing trips in major cities are made by people who would have otherwise used cleaner means of transit to get to their destination.
Getting the millions of people who drive for Uber to switch to electric vehicles will arguably be the hardest part of the company’s plan. Uber drivers are classified as independent contractors, and many use their personal cars to drive for not just one but several gig economy companies. In 2018, Uber explored providing cash incentives to some North America-based drivers who switch to electric vehicles, but it never expanded the program beyond the original pilot phase.
Uber says it intends to partner with a variety of stakeholders — including automakers, car rental operators, electric vehicle charging companies, and others — in what is likely to be a massive effort to achieve its ambitious goal of a “fully zero-emissions platform by 2040.”
Uber will work with automakers — General Motors in the US and Canada, and Renault-Nissan in cities in the UK, France, Netherlands, and Portugal — to “extend attractive offers” on electric vehicles to drivers. It will work with car rental company Avis to make EVs more accessible for drivers to rent.
Uber is also looking to governments to help it transition to electric mobility. The company doesn’t expressly reject regulations requiring ride-hailing companies to use more EVs, though it does say it “urgently need[s] more robust collaboration between industry and government stakeholders.” Uber points to its progress in London, where it recently added an extra 15 pence (USD $0.19) per mile under its new Clean Air Plan. The surcharge will go toward helping Uber drivers switch to EVs, with the goal of having all cars on the app be fully electric in London by 2025.
To be sure, the Clean Air Plan didn’t materialize out of, well, thin air. In 2019, the Transport for London ruled that private for-hire vehicles, including Uber, would no longer be exempt from the £11.50 daily congestion charge for driving in central London. Only zero-emission vehicles will still be exempt from paying the fee — which partly explains Uber’s urgency in getting its drivers to switch from petrol to EVs.
A similar plan is underway in France, where Uber plans to set some of its own money to help French drivers purchase EVs. Numerous European countries already have laws in place that regulate the sale of gas-powered vehicles and lay out incentives to increase the number of electric and zero-emission ones. Earlier this year, the Canadian province of British Columbia passed legislation aimed at ending the production and sale of fuel-burning cars.
In Norway, Europe’s leading electric market ahead of Germany, one out of every three cars purchased is an electric vehicle. The country is even installing the world’s first electric taxi charging system to help it achieve a zero-emission nationwide cab fleet by 2023.
Meanwhile, numerous other countries have set out targets for banning traditional cars and vans, with Norway aiming for 2025 and France and the UK for 2040 and 2050, respectively. (Granted, the legislation for actually mandating the bans lags far behind.) The mayor of Denmark capital Copenhagen went so far as to propose a ban on diesel cars in the city last year that would go into effect by the end of 2019; Copenhagen has since tempered its proposal to aim for net-zero carbon emissions and carbon neutrality by 2025.
A recent report from European research and campaign group Transport and Environment shows a correlation between the surge in the number of ride-share drivers in major European cities and increasing levels of air pollution.
The US is lagging behind most of the world in terms of climate policy. Senate Democrats recently proposed a plan that would provide car owners with “large discounts” if they trade in their polluting, gas-powered vehicles for “clean” electric ones. But Republicans have resisted efforts to prop up the electric car industry through tax credits and incentives.
Transportation is the sector contributing most to climate change in the United States, making up nearly a third of all greenhouse gas emissions in the nation. And so far, efforts to rein in its pollution have pretty much failed. Planet-warming gasses from transportation grew more in absolute terms than any other sector between 1990 and 2017, according to the Environmental Protection Agency.
Uber isn’t the first transportation company to pledge to shift to electric vehicles. In June, Lyft announced it would transition “100 percent” of its fleet to electric vehicles by 2030. Which company makes it first — or at all — has become another source of competition between the two companies.
“While we’re not the first to set ambitious goals in transitioning to EVs,” Uber CEO Dara Khosrowshahi said in a letter, “we intend to be the first to make it happen.”